Polymarket has kicked off 2026 facing a new slew of regulatory actions from jurisdictions in Europe and the U.S., even as it edges its way back into the American market.
On Friday, both the Hungarian Supervisory Authority for Regulated Activities and the Portuguese Gaming Regulatory Authority issued bans against the prediction market, accusing it of illegal gambling activity.
"I just don't really know what this has to do with gambling. If we are gambling, then I think you're basically calling the entire financial market gambling,” he said at the time, describing the market as “an open financial marketplace” where people trade against each other instead of betting against a sportsbook.
But regulators beg to differ.
Further compounding the issue is that in many places, betting on the outcome of political events is illegal—including in Portugal and also Taiwan, where Polymarket users have been investigated for betting on the outcome of the most recent presidential elections.
It prompted U.S. Representative Ritchie Torres (D-NY) to draft a bill prohibiting federal employees from using prediction markets when in possession of relevant insider knowledge.
Kevin de Patoul, CEO of Keyrock, told Decrypt that prediction markets are a fascinating test case for blockchain’s core promise of turning collective intelligence into tradable, verifiable data.
“But they’re also showing us how fragile that can be when incentives or visibility are misaligned,” he said. “It’s evident there’s a need for clearer boundaries between participation, governance, and influence. Markets built on trustless systems still need trusted frameworks if they’re going to inform anything meaningful beyond speculation.”
“The next phase will depend on who can design markets that preserve open access while embedding transparency and compliance by design,” de Patoul added. “That’s how I see prediction markets evolve from entertainment to reliable, institutional-grade signals.”
“Further regulatory measures may be applied, depending on the authority’s final assessment of Polymarket’s activities,” its Budapest-based lawyers wrote. “The possibility of the block being removed cannot be entirely excluded at this stage.”
Decrypt reached out to Polymarket for comment on the bans, but did not immediately receive a response.
